Iraq Plans to triple its Oil Output Capacity By 2020

Iraq intends to triple its oil production capacity to 9 million barrels a day by 2020, says Hussain al-Shahristani, the country’s deputy prime minister for energy.

“We feel the world needs to be assured of fuel for economic growth,” he said at an energy conference in London, The Telegraph reports.

“It’s very difficult to predict actual world [oil] demand by 2020 because the world economy is unpredictable.”
Baghdad’s aim is to boost its economy and challenge Saudi Arabia as OPEC’s swing producer, according to the paper.

To be sure, given the violent social conflict in Iraq, it’s not clear how much the country can increase its oil production. And even if it does lift output, it would have difficulty putting in place the pipeline and port infrastructure necessary to export more oil, The Telegraph notes.

Saudi Arabia has worked within OPEC to keep output low enough so that oil prices stay above $100 a barrel. Brent crude stood at $107.93 Wednesday.

Since Iraq rejoined OPEC after the country’s 2003 war, it has been exempt from the group’s quotas, but now it faces pressure to comply, according to The Telegraph.

Meanwhile, in the United States oil market, demand for distillate fuel, including diesel and heating oil, jumped close to a six-year high last week amid the cold weather, according to the Energy Information Administration.

“Demand is so high because of the ultra-cold weather,” Michael Lynch, president of Strategic Energy & Economic Research, tells Bloomberg.